Brightside targeting £250m GWP within five years

cash-tap-money

Broker looking to digital for organic growth but is also ready to buy.

Brightside Group is looking to boost its 150,000+ policy count across car, van and SME to 300,000+ within three to five years, according to CEO Brendan McCafferty.

“It is perfectly doable,” he told Insurance Age explaining that the target was to grow gross written premium from £100m to around £250m in the same time frame, excluding managing general agent (MGA) business.

McCafferty listed the ingredients for a successful broker as scale, a niche place in the market and having a digital agenda.

“The shareholders and I are very keen to grow this business boldly and rapidly,” he summed up.

Acquisitions
In his view the results can be achieved organically, however Brightside is also open to buying businesses.

“We have had conversations with a couple of organisations and continue to seek them out,” McCafferty confirmed.

“It would have to add something to one of those three criteria and I’d also look quite seriously at MGAs.”

CEO
McCafferty joined Brightside this August replacing Mark Cliff as CEO who had stepped down a month earlier to become non-executive chairman.

He found a business that was growing but had potential to do more and stated he was excited about the opportunities with the cornerstones and foundations in place.

Digital remains a high priority.

“It is a wide term and has become a badge that is rather unclear and opaque,” he accepted.

“I would rather describe it as the exploitation of technology.”

Focus
The focus will be across elements such as improving the multi-channel customer journey and tackling manual processes while keeping the ability to be contacted and give advice.

He noted that further combining data and technology on risk selection and pricing would in turn be integrated more with partners to deliver greater insight and valuable propositions from all.

And underpinning it all would be delivering for staff.

On the final point he highlighted that embedding technology was not designed to lead to cost cutting on roles. In fact the 500 person headcount “will grow modestly over the years ahead”.

MGA
Brightside has long-touted the launch of its MGA Kitsune.

It was originally set to hit the market in September 2017 and was then delayed until the second quarter of 2018.

McCafferty indicated that Kitsune would be rolling out its offering imminently with mid £30m of capacity for the first 12-18 months.

“We are in the final stages now but I’m not going to be tied down to when it will happen,” he said.

“It is not far away and will add tremendous value to the group.”

He stated that the team had done a “great job” of building expertise, infrastructure, governance and capacity however declined to name who the capacity providers were.

Axa
McCafferty’s arrival at Brightside came after just under a year as UK CEO intermediated and direct at Axa.

His departure surprised the market however he underlined that he was still a “big fan” of Axa and had moved on.

“I’m not going to talk about Axa,” he repeated.

“I enjoyed my time there and benefited from it.”

As well as running an insurer his CV also includes Willis and Flood Re which he said showed the experience of a “growth and change agenda” that he was bringing to Brightside.

“That is very much what Brightside is about,” he pointed out.

“It is a business that has to adapt and be radical.”

Owners
Private equity business Anacap has owned the business since 2014 and McCafferty said his experience of them was they were helpful and proactive.

“They are deeply interested in the mechanics of the business. They are very focused on the data and so am I. There is a natural fit between us.”

Adding: “They don’t get confused in who is running the business.”

The four year ownership though has led to speculation in the market that Anacap could be poised to sell up.

“They are in the business of buying and selling businesses,” he observed.

“It is natural to think that Anacap would want to sell the business in the not too distant future.”

Flash-bang
However he stressed that he did not think “the flash to bang on any transaction is at all imminent”.

Instead he said he believes Anacap will still be the owner in a year’s time.

“They know the business has got tremendous growth potential and we are yet to launch the MGA which has been a huge investment for them.”

In its 2017 results Brightside posted a loss of £10m.

McCafferty argued the company was, and is, profitable stressing the impact of exceptional items and that Ebitda had risen – it increased from £3.9m in 2016 to £5.1m.

“The Ebitda will improve year on year,” he predicted but declined to be drawn on whether the post-tax result would be written in black ink rather than red.

“I’m not going to reveal that at the moment. I’m not going to reveal the results ahead of time, that would be a completely inappropriate thing to do.”

Litigation
Since McCafferty joined he has seen an end to the litigation that has surrounded the business and has restructured the management.

David Sweeney, managing director of insurance, has left the company which is now looking for a chief operating officer (COO) instead.

The COO will be tasked with creating the headroom to focus on sharing the digital agenda across the organisation.

“We have business in Southampton, Torquay and Bristol that are very successful, that will continue to be the case,” McCafferty concluded.

“I’m a great fan of giving people a sense of ownership of their businesses and letting them concentrate on what they are good at.”

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